U WANNA BET? GO AHEAD
Supreme Court ruling legalizing gambling means states, leagues and teams will hit the jackpot!
You can bet on this! The U.S. Supreme Court lifted a ban on sports gambling Monday morning, opening the floodgates for legalization of a $150 billion industry across the country. It now falls to individual states to decide if they want to allow sports wagering or not.
The Supreme Court ruled 6-3 in favor of the state of New Jersey, which challenged a law that allowed sports betting to take place only in Nevada and three other states. A historic moment in American sports history, half the country could soon legalize sports books after the court determined the federal ban on sports betting established by the Professional and Amateur Sports Protection Act of 1992 (PASPA) is unconstitutional.
Major professional sports leagues, which have been opposed to legalization publicly for years, have already met with legal sports book operators to begin the discussion about how they can make money off legal sports betting, according to sources. Legalization also stands to benefit media companies as TV viewership, content consumption and overall interest in games where it may have been minimal in the past are all expected to skyrocket with more people putting money on games than ever before.
But that’s not all who look to profit. As the sports betting issue turns to state lawmakers now, pro leagues have said they want a piece of the bets placed on their sports. They’re calling the fees an “integrity tax,” wherein they would receive money from each state taking bets on sports events. While making the case for such a fee, the leagues claim that they need this money to better sheriff their sports in this Wild West world of gambling.
Except there is no such tax currently in Nevada, and the idea that there is no integrity in legal sports gaming right now is insulting to Vegas insiders. Joe Asher, the CEO of William Hill, a leading Sports Book, said these payments equate to a straight-up money grab. “I don’t think it makes any sense at all,” Asher said. Leagues initially proposed taking one percent on total handle, which amounts to about a 20 percent tax on revenue, on top of whatever state and federal taxes are established. The greed in demanding an integrity tax would hurt sports books and also creates a hurdle underground bookies would not be saddled with.
“One would think the concerns around integrity should be less now in a legal and regulated market than they have been all this time this illegal market has been going on,” Asher said. “This is just a cut of the action. That’s all this is.”
Dallas Mavericks owner Mark Cuban said Monday’s ruling has already greatly benefited team owners.
“I think everyone that owns a top-four professional sports team saw the value of their team double,” Cuban said on CNBC.
The NCAA and major pro sports leagues fought legalization, clutching to the idea that sports betting is damaging to the integrity of the games. But in recent years, leagues like the NHL and NFL have seemed to soften their stance, agreeing to put teams in Las Vegas for the first time. UNLV basketball has been sponsored by the gambling business in the past, so the NCAA seems hypocritical in its opposition to gaming.
“Today the United States Supreme Court issued a clear decision that PASPA is unconstitutional, reversing the lower courts that held otherwise,” the NCAA said in a statement. “While we are still reviewing the decision to understand the overall implications to college sports, we will adjust sports wagering and championship policies to align with the direction from the court.”
The NHL was the first major pro league to put a team in Las Vegas. The Golden Knights are the hottest ticket in town and are among the great stories of the season as the expansion team is playing in the Western Conference final.
The NFL will be the next league to have a team to Vegas when the Raiders move in 2020. Football has a long history with gambling and has stood firm against legalization. But just as the NFL battled fantasy sports legalization, the league stands to reap huge financial rewards from straight-up betting.
More than $4 billion was wagered on the Super Bowl in February and more than 97 percent of that was gambled illegally. Now the league can monetize that activity by selling it to a more engaged fan base.
While there is already a chance that pro sports contests can and have been influenced by black market gambling, leagues now must brace for added wagering interest. Daniel Wallach, a sports gambling expert and a partner at the law firm Becker & Poliakoff, believes professional sports leagues have to work harder to make sure no funny business is happening.
“If there is so much as one scandal,” Wallach said, “it could have an impact on all the leagues.”
Wallach said the issue will now get handed off from lawyers to lobbyists as the issue of full, federal legalization kicks off. More uniform regulation is something the leagues are in favor of and something the NFL even alluded to in its statement Monday.
“The NFL’s long-standing and unwavering commitment to protecting the integrity of our game remains absolute,” the league said in a statement. “Congress has long-recognized the potential harms posed by sports betting to the integrity of sporting contests and the public confidence in these events. Given that history, we intent to call on Congress again, this time to enact a core regulatory frameworks for legalized sports betting. We also will work closely with our clubs to ensure that any state efforts that move forward in the meantime protect our fans and the integrity of our game.”
While the leagues have opposed sports gambling, the unions of the four major sports recently put out a joint statement calling for a piece of the massive money pie that legalization will create.
“The time has come to address not just who profits from sports gambling, but also the costs,” it said. “Our unions have been discussing the potential impact of legalized gambling on players’ privacy and publicity rights, the integrity of our games and the volatility on our businesses. Betting on sports may become widely legal, but we cannot allow those who have lobbied the hardest for sports gambling to be the only ones controlling how it would be ushered into our businesses. The athletes must also have a seat at the table to ensure that players’ rights and the integrity of our games are protected.”
Daily Fantasy Sports has won legalization on a state by-state basis on the logic that fantasy sports is not gambling. Still, sites like Fan Duel and Draft Kings have supported traditional sports gambling and said they will offer those services in addition to their existing menu.
“Our mission has always been to bring fans closer to the sports they love and now, thanks to the wisdom of the Supreme Court, Draft Kings will be able to harness our proven technology to provide our customers with innovative online betting products,” Draft Kings CEO Jason Robins said. “This ruling gives us the ability to further diversify our product offerings and build on our unique capacity to drive fan engagement.”
Before Monday’s decision, Nevada, Delaware, Oregon and Montana were the only states exempt from PASPA because they already had gambling regulations in place. New Jersey and former Gov. Chris Christie initially fought for legalized sports gambling as far back as 2011. Christie twice sued the government in an effort to get sports wagering legal. The Supreme Court case, Murphy v. National Collegiate Athletic Association, challenged the government’s right to control the regulatory power of individual states.
“Today’s decision is a victory for the millions of Americans who seek to bet on sports in a safe and regulated manner,” the American Gaming Association, which has long advocated for legalization, said in a statement.
New Jersey is prepared to offer sports wagering at horse racing tracks and in casinos as soon as in the next few weeks. New Jersey lost in its bid to legalize in federal and district court, and the U.S. Third Circuit Court of Appeals. The state appealed the case to the U.S. Supreme Court and it was approved last summer. In addition to New Jersey, Connecticut, New York, Pennsylvania, West Virginia and Mississippi are all expected to follow with their own sports betting legislation.